City building outlines

EPC Regulations 2018 – Advice for Landlords

EPC logo

EPC Regulations 2018 – essential landlord advice

If you’re a domestic or commercial landlord, are you aware of the changes in EPC regulations 2018 has in store? With time in short supply for some, and in order to ensure you have the correct information to hand, here’s our breakdown of the legislative changes and what they mean to you…

As part of its attempt to meet targets and achieve ‘close to zero’ CO2 emissions from all UK buildings by the year 2050, and its obligations as per the Energy Act 2011, the Government is ready to roll-out new EPC regulations for April of this year.

This tightening up of energy performance regulations means that landlords who rent out residential or commercial properties may need to make changes either now, or in the near future, to ensure their compliance and mitigate potentially costly void periods or penalties.

Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015

The 2015 regulations introduced minimum energy efficiency standards (MEES) of an ‘E’ rating or above for EPCs – and as of the 1st April 2018, if your property doesn’t meet this minimum requirement, once the current tenancy is up, you can’t renew it or rent to a new tenant until it does.

This means that it’s time to check your property EPC records and cross-reference them with your tenancy end dates – and start scheduling in the work required to increase your rating to ‘E’ or above if necessary.

What if I have a long-term tenant?

Good question – and this does give you a bit of breathing space, but only for a few years. Even in the case of long-term tenancies, the minimum requirements are coming for you – in April 2020 for domestic, and April 2023 for commercial properties.

Are there any exemptions/exceptions?

Most ‘normal use’ properties will be subject to the new EPC regulations, but yes, there are some exceptions.

Domestic rented properties don’t need an EPC – and are therefore excluded from the requirements – if they’re:

  • Holiday lets/occupied for less than 4 months per year
  • Listed/protected AND where work required to meet the MEES would result in ‘unacceptable’ alterations or negatively impact the value
  • Under demolition order

For commercial properties, exemptions include:

  • Listed/protected buildings where work required to meet the MEES would result in ‘unacceptable’ alterations or negatively impact the value
  • Temporary structures used for 2 years or less
  • Low-energy use buildings such as storage facilities, workshops and agricultural stores etc
  • Detached properties of less than 50 m2
  • Due for demolition

There are a few other exclusions, such as tenancies of less than 6 months or more than 99 years, but these are the most likely ones you’ll need to consider.

What happens if I don’t meet the new EPC requirements?

Penalties for non-compliance will be the jurisdiction of Local Weights and Measures Authorities (LWMAs) and will be calculated according to the property’s rateable value.

Penalties will vary according to the length of the breach. For less than 3 months, the penalty will be calculated thus:

  • For commercial landlords – 10% of the rateable value, with a £5,000 minimum/£50,000 maximum
  • For domestic landlords – £2,000

For breaches in excess of 3 months, the penalties are:

  • For commercial landlords – 20% of the rateable value, with a £10,000 minimum/£150,000 maximum
  • For domestic landlords – £4,000

Our advice for landlords

While some landlords may feel that the upcoming EPC regulations 2018 may unfairly cost them in improvement works, it’s worth noting that lower fuel bills and a more energy efficient property can represent an attractive proposition to prospective tenants.

There are lots of ways to improve the efficiency of your building(s), and we have plenty of experience in helping landlords to improve sustainability and make positive changes to their property and rental prospects – so do feel free to contact us if you’re a landlord looking for advice.

Unfortunately, as with all things compliance, you’ll have to accept the changes and ensure you meet the requirements in a timely fashion in order to prevent a costly financial penalty. So start checking your contracts and EPC certificates, and get the wheels in motion if needed to ensure you meet the new EPC regulations for 2018.